Building cheap SAN

You should probably just use a FC SAN; if you have FC Storage already, you can grab an FC Switch and FC HBAs for the host servers; that will be enough to get a simple FC SAN going.

You can use a server to act as a FC-iSCSI gateway; software like Starwind or SanMelody run on Windows; or most Linux distros come with iSCSI Target software.

Handling the SAN IO will depend on whether it's IOps or MBps you're looking for. More IOps requires more CPU usage to process each; both require as much cache and the fastest buses you can find.

GigE is just as fast as FC; but there's more overhead with GigE usually. iSCSI runs on TCP/IP and that adds a lot of overhead. The Ethernet frame is very comparable to the FC frame however; so technologies like ATAoE and HyperSCSI can keep up, with the caveat that a single 4Gbps FC can do a single stream at that speed, and 4 GigE would need 4 connections to saturate the fabric (theoretically; real life is always a little worse).

So you talk about SATA and SAS drives... do you have a FC to SAS controller that you're planning on plugging into a FC-iSCSI Gateway Server, that's then relayed to the Host servers?? That's a lot of overhead and will pretty much kill performance.

If you want to use SAS hardware you can create a SAS SAN cheaper yet (and no FC or iSCSI); drives plug into it, SAS HBA on the servers, and the SAN chops the drives into "LUNs". Products like the HP MSA2000sa will do this. This is more limited than FC or iSCSI; but for simple environments is very cost effective.

If you are wanting to do iSCSI, you don't need FC hardware.

You may want to look at OpenFiler or FreeNAS to build your storage system.

[UPDATE] It really appears you are looking for basic direct attached storage. A homebuilt version of a Dell MD1000. iSCSI is irrelevant in this case. SATA, eSATA, SCSI, SAS, and Fibre Channel are all possible protocols. This isn't shared storage, but just expanded local storage.